S&P ETP expert says Korean ETF market is growing in healthy way – The Korea Herald

John Davies, global head of exchange-traded products at S&P Dow Jones Indices, delivers a presentation at the 2021 Global ETP Conference Seoul held at the Korea Exchange’s Seoul office on Tuesday. (Screen capture)

John Davies, global head of exchange-traded products at S&P Dow Jones Indices, delivers a presentation at the 2021 Global ETP Conference Seoul held at the Korea Exchange’s Seoul office on Tuesday. (Screen capture)

South Korea’s exchange-traded fund market is getting very competitive and growing in a healthy way, in line with the local asset management firms’ fierce competition, an executive from S&P Dow Jones Indices said Tuesday.

“The Korean ETF market’s 10-year compound annual growth rate is around 25 percent, which is way above the global market’s rate of growth of 16 percent,” John Davies, global head of exchange-traded products at S&P Dow Jones Indices said during his presentation at the 2021 Global ETP Conference Seoul, held at the Korea Exchange‘s Seoul office.

According to the expert, the combined assets under management by asset management companies here surged to $54 billion, where over 500 funds have been launched so far as of 2021. Among asset classes, equity and fixed income each showed threefold increases compared to 2012.

While the global ETFs’ combined assets under management by asset management firms around the world came to $9 trillion so far this year, this year is likely to be the first time in the marke’s history to attract $1 trillion worth of fresh funds, according to Davies’ forecast. Contrary to the past when it took 19 years to reach the $1 trillion mark, the market has been showing phenomenal growth lately, he said.

He also suggested that the exchange-traded products related to environmental, social and governance efforts and new technologies such as blockchain, cryptocurrencies and artificial intelligence are likely to continuously grow but passively managed funds will be enrolled under innovation and various collaboration. 

Participatns of the 2021 Global ETP Conference Seoul pose for a photo at the at the Korea Exchange's Seoul office on Tuesday. (KRX)

Participatns of the 2021 Global ETP Conference Seoul pose for a photo at the at the Korea Exchange’s Seoul office on Tuesday. (KRX)

Meanwhile, the bourse operator’s annual event was held under the theme “The new wave of market innovation — Strategies for post-COVID investment landscape.” Since 2010, the international conference has invited exchange-traded product market’s opinion leaders from both in and out of Korea.

Including Davies and the KRX chairman Sohn Byung-doo, Morningstar’s indexes strategist Dan Lefkovitz, S&P Dow Jones Indices’ head of Korea Kim Beom-suk, MSCI vice president Kim Tae-woo and the US Securities and Exchange Commission senior policy advisor Steve Oh participated in the conference this year.

By Jie Ye-eun (yeeun@heraldcorp.com)